Happy Labor Day. Are Unions Dead?

An interview with Rich Yeselson, labor strategist and expert

September 1, 2014

Editor's Note: Rich Yeselson worked in the labor movement as a strategist and researcher for contract and organizing campaigns for over 20 years. "Fortress Unionism" an essay he wrote in 2013 for Democracy about the decline of the postwar labor movement and its future prospects, has been widely read, discussed and contested among labor activists and thinkers. For Labor Day, 2014, he seemed like a good person to ask about the challenges and opportunities for American unions today. What follows is a lightly edited transcript of a conversation we had over e-mail.

Are unions dead?

No.

Explain, please.

Their power has declined enormously, obviously, but unions, especially the largest ten or so, are still significant American institutions. Their national political influence is more defensive than pro-active, but unions played a big role in strategizing and passing the Affordable Care Act, and recent executive orders indicate that they are still able to win some advances for their members and workers generally, at least when Democrats have some power.

Remember, unions have thousands of employees, millions of members, and major real estate assets in large cities like Washington and New York. Taft Hartley pension funds, invested on behalf of members in the private sector, have a market value of several hundred billion dollars. Federal, state and local public employee pension funds, also invested on behalf of a significant number of unionized workers, are probably valued even higher. In key metropolitan areas--New York, Los Angeles, San Francisco, Seattle, Las Vegas, Chicago--unions are major political and economic players, and that influence extends to the state level, too.

Now, just to be clear: I certainly am not denying unions have struggled or that their power has declined enormous over the past half century. Density is one place you see that vividly.

Can you take a second to explain to readers what “density” means in this context—and why it's important?

Union density is a quick way to measure union power. It’s the percentage of workers who are members of unions (plus the small number who are under union contracts, but choose not become members). Union economic power--the ability to increase wages and benefits across an entire industry--is defined by the percentage of members within a particular economic sector. The classic postwar example is the auto industry. When the UAW had comprehensive contracts with every U.S. based plant, they effectively set a wage rate for the entire auto workforce.

And not just auto. Along with the Steelworkers unions and a few others, these unions raised wages even at a non-union companies that wished to preemptively foreclose union drives at their facilities.

Now, of course, "transplant" auto facilities in the US owned by Japanese, Korean, and German companies can and do undercut UAW won wages at three American owned car companies. This is precisely what high union density is supposed to prevent. An old axiom holds that the economic object of union organizing is to "take the wage out of competition"—to prevent non-union companies from setting a competitive lower wage and benefit scale that will save them money vs. unionized companies, and compel unionized companies to follow. If the wage is not in competition, than the quality of the product, innovation, etc. are the ways that companies, ideally, compete.

Are there any sectors where unions in this country still have that kind of density?

Unions still have a lot of power among longshoremen on both coasts--and the longshoremen have enormous leverage because our imports and exports flow through those ports. Airlines are a troubled industry, but most airlines remain unionized, including one of the most consistently profitable ones, Southwest. The Teamsters drivers have sustained their power with UPS, despite the constant looming threat of non-unionized FedEx.

There are a few others, but, in general, the U.S. lacks the kind of industry wide high density you still find in parts of Europe. And the power of American unions is reduced even further because negotiations are almost always on workplace level, sometimes a company level, but not at all at the sectoral level, as, for example, in Germany.

The decline of private-sector unions in America—how much is because of weak labor laws, and how much is because of the way the economy is changing?

A lot of people don’t realize that the decline has occurred all over the advanced capitalist world, even in countries with laws that protect and promote unions far more than in the U.S. Essentially, we have seen a great shrinking in the advanced world of what was the core union demographic: manufacturing and mining workers. Production in those sectors is high, but companies need fewer workers to do it—and they’ve transferred much of the work to developing countries like China, where they can get away with much lower wages.

But, yes, the United States is a special case. The peak of union density in the US following the Second World War was lower than in other wealthy democracies, and its trough is now lower, too (France actually has smaller percentage of union members than the US, but union contracts cover almost the entire workforce.). In no other advanced country is the entire political economy as relentlessly opposed to unionization as it is here. The U.S. has the most hostile anti-union management/ownership class, and corresponding conservative politicians and media to assist it, in the advanced world. The legal framework assumes that companies—the people who sign workers check—have a right to interfere with their right to choose a collective bargaining agent. Workers do not get a corresponding right in the United States to participate with management in investment decisions. Anti-union activity is flourishing billion dollar consulting business. Laws to fight it are toothless. Today, decades after the National Labor Relations Act became law, Republicans don't accept its basic legitimacy—and do everything they can to undermine the NLRB.

And it’s not like that elsewhere?

Pretty much in every other country in Western Europe, Canada, even Australia and the U.K. (which share some labor-management features with the U.S.), the assumption is that unions are basic ingredient of liberal capitalism. Among conservatives and business owners in those countries, you’ll hear a lot about how they are inefficient, too powerful, or just pains in the ass. But pretty much everybody accepts them as a normal part of the political/economic/legal landscape. That’s simply not the case here.

What’s ironic about that is that unions are inherently conservative institutions, which historically developed parallel with the development of capitalism itself. They are as much a part of capitalism as Henry Ford or Apple. Unions use contracts—and there’s nothing more intrinsic to capitalism than the right of contract—to link their members to the fortunes of the companies they contract with. They are capable of having huge fights with capital (as in the thirties)—which raise the hopes of leftists—but, usually, over the attainment of very incremental ends---which disappoint leftists. Marx had nothing but contempt for British trade unionists, and Trotsky saw no value in unions at all. Yet conservatives and most libertarians hate them. Weird.

Absent changes in those labor laws, are there opportunities for unions to make serious inroads in industry today? If so, where?

Low-wage retail work, for starters. In the last couple of years, we've seen some activism there, with the examples of Walmart and fast food workers. Trucking, an economically critical and massively de-unionized sector since deregulation in the late seventies, is another one. As Neil Irwin reported recently in the New York Times, companies are complaining about a driver's shortage, yet they aren't raising wages in an effort to attract more recruits. Uh . . . gee . . . maybe the drivers need the leverage of collective bargaining to force the companies to cough up some more money?

Graphic from the New York Times

So, in that sense, you can say there are plenty of opportunities for unions to organize. But that doesn't mean there is an obvious or intuitively logical place to make "inroads." Workplaces are smaller than ever. In the 1930s, huge steel and auto plants meant that if the workers caught union fever in any one of those complexes, a big chunk of the industry would suddenly be organized, and that large struggle would become instant national news, inspiring workers elsewhere.

Everything now conspires against those kind of large organizing projects--the law, the cost per worker, the boredom with, or simple ignorance of the media about unions, including many liberals. It can certainly happen--nobody would have bet a nickel forty years ago that Las Vegas would have the most flourishing union culture of any city in the country today. And even today, there are campaigns that, over time, unionize thousands of workers for the first time. But that just isn't enough to create the huge growth on scale by which unions have always advanced, both here and in other Western countries.

Historically, unions don't do incremental growth. There is some kind of social crisis—a war, political unrest, economic collapse—and memberships surges. The rest of the time, often for decades, membership is flat or declines.

There are a lot of seriously brilliant, deeply committed people working in the labor movement who are constantly analyzing and researching the macro and sectoral political economy. But nobody has figured out how to link an organizing strategy that would target large sections of the economy still immune to globalization (transportation, retail, healthcare, hospitality, food services) with the necessary militancy of millions of workers that would be required to defeat the overwhelming conservative economic, political, legal, and cultural forces that would be arrayed against the union campaign. The last time something that big happened, during the 1930s, violent civil strife occurred—17 workers were killed in the bloody summer of 1937 alone—before economic and political elites permitted mass unionization.

A few weeks ago, the general counsel for the NLRB declared that fast-food workers at McDonalds were actually employed by the company, rather than individual franchise owners. Was that a big deal?

Well, it's definitely a big deal conceptually, but we won't know if it's a substantively big deal for a while. This is just an opinion issued by the NLRB's general counsel. It hasn't even been tested yet, via complaints filed with the full board. And if the full board does ratify it, McDonalds and every other major franchisor will challenge the decision in federal court. And I wouldn’t bet on this Supreme Court upending franchise law in a way that makes large corporations more vulnerable to unionization.

Emmanuel Dunand/AFP/Getty Images

But, if somehow, this became legal doctrine, it could utterly transform a large labor-management battleground. There's no viable strategy currently to organize, in aggregate, the millions of workers who work for franchisees. Think about it in its totality, across both all of fast food and also hotel chains like Super 8, Hampton Inn, Motel Six, Days Inn. etc.. The franchisees are mostly small fries (pun intended) with little profit margin. Even bigger franchisees don't have enough properties to constitute a large portion of the workforce that serve food at McDonalds or Burger King. If you’re organizing these places store by store, you’re never going to get anywhere—and with the mom-and-pop owners, there’s not all that much they have to give.

The big franchisors love it this way. They take a top line percentage every month, whether the franchisee makes any money or not. At the same time, the franchisors legally impose their standards on every franchisee. So if Hilton decides that every room of every Hampton Inn must contain a micro-wave, the franchisees are required to comply—at their own expense. Then the franchisee has to deal with labor supervision and costs.

If you can make a company like McDonalds accountable as a joint employer, then you’ve got some influence with a massive corporation with the breadth and resources to set new wage and benefit standards nationally. That’s more effective than dealing with a small business guy in Traverse City, Michigan or Forest, Mississippi. But we're a long way from that.

We haven't talked much about public sector unions. Labor has better numbers there, obviously. But as we all saw in Wisconsin, these unions are also vulnerable. I think a lot of people associate them with the aspects of government they don't like—bureaucracies, too much government spending, and so on. Pretend I'm your typical, non-unionized voter. Convince me, in a paragraph, that these unions do more good than harm.

Public sector unions are a hard sell to the vast majority of private sector employees who are themselves non-union. But public sector unions didn't emerge in a vacuum. They happened for the same reasons that private sector unions do: workers band together when their employers mistreat them in the zillion ways that lousy bosses can mistreat their workers. It's hard to develop an ethos of professional service without the imperative of collective advancement and respect. Dana Goldstein does a great job of tracing the development of that ethos in her new history of the teaching profession, The Teacher Wars. I would rather that workers in the public sector, i.e, that are paid by my taxes, are fairly treated and compensated. I think that is more likely to lay the foundation for good public services than to expect those services to be delivered by a disgruntled workforce. So yeah, we can all talk about "reforms"—if actually undertaken in good faith—and remind ourselves that the provision of services to the citizen consumer is the highest goal of the public sector. But those Finnish teachers we keep hearing so much about are unionized, too, so I don't think there is anything intrinsically inefficient about public sector unions.

Conservatives make all kinds of criticisms of unions—they’re inflexible, they tend to be corrupt. Pick one of their complaints that you find the most reasonable and tell me how you’d address it.

There are several reasonable critiques of unions. I’m not sure they’re really intrinsic to unionism—in other words, unions could accommodate these critiques and still do what they do. Also, it must be said, the most cogent critiques of unions don’t come always come from conservatives. Sometimes they come from the left, which argues, for example, that most unions are structured to limit rank and file democracy.

That said, the strongest critique I hear from the right (and some centrist Democrats too) about public sector unions is that their first priority needs to be the excellent provision of services, rather than the job security of public sector workers. And you know what? I agree! Who isn’t in favor of excellent provision of public services? But given how little revenue we raise and how little we spend on public services, relative to other countries, it is easy to imagine public policies that would boost public sector services and end up creating more employees, too.

What about the argument that private sector unions stifle innovation?

This is the argument that unions compel management to follow cumbersome “union work rules,” which they secure in collectively bargained contracts. As these arguments go, these rules lower productivity and damage the quality of the company’s service or product. This sounds plausible and evokes the flattering American self-image that we are awash with brilliant can-do entrepreneurs who could invent a better mousetrap—if only those dinosaur unions didn’t gum things up.

The trouble with this argument is three fold: First, it is not at clear that non-unionized businesses are more productive than unionized ones. There is a long running academic debate about this, and it may well depend upon the particular industry or job classification. What we do know is that more of the fruits of productivity at a unionized company go to the workers, rather than management and shareholders. Naturally, bosses don’t like that.

Justin Sullivan, Getty Images News

Second, some of the most famously efficient and admired companies in the US—UPS, Southwest Airlines, the large, luxurious convention center hotels in major cities—are unionized. Think of UPS getting millions of packages each year to people’s homes and businesses via beloved and unionized UPS drivers. Somehow those excellent Teamsters contracts haven’t destroyed the company—quite the contrary! Same thing for the German and Japanese based car companies that conservatives prefer to American ones. Yet, in their home countries, they are unionized, too.

Finally, contracts are not unilaterally imposed at gunpoint upon terrified managers. They are bargained between two institutions who have both common and conflicting interests. If the terms of the contract undermine management interests, they are free to try to change the terms of that contract when it expires. We’re seeing a similar kind of contract fight today between a company, Amazon, and one of its suppliers, Hachette. Union-management contracts are no different.

But what about the auto industry? I covered that story—everybody agreed that work rules were part of the problem with the industry's decline.

The odd thing about the "brain dead union work rules destroy creative American companies" riff is that it's often the argument used to explain the deterioration of the American car companies. Which somehow implies that the vaunted right of management to make all creative design decisions had been granted to the president of the UAW and the rank and file auto workers. U.S. cars sucked for years because Detroit designed lousy cars that failed to keep up with their foreign competitors. As EPI [the Economic Policy Institute] noted a couple of years ago, The Big Three went into a death spiral--constantly lowering the costs of lousy cars and losing profits per unit, but still never hitting a price point that would sustain market share--Detroit lost over 40% of its market share over a 30 year period. Now that they are designing smarter, more attractive cars, they're back in the game. Union rules can't hamstring "innovative" companies if the companies aren't really innovative. Yes, I'm sure there are work rules which are obviously irrational, and management has the right to push to eliminate them. But a lot of them are just what might also be called "worker protections" which non-unionized employees lack, and which don't have much to do with innovation one way or another.

OK, now pretend I'm your typical American, non-unionized and pretty wary of them by this point. Give me your elevator pitch on why I should care what happens to them—how their presence helps me.

It's like this. Whether you realize it or not, unions help you in countless ways. Union workers still hold a substantial wage and benefit premium over non-union workers. Basically, you're more likely to be paid better, have more vacation time, a better benefit package, than if you're not in a union. Your workplace is likely to be a lot safer (compare unionized vs. non-unionized manufacturing facilities—and coal mines.) If union standards for pay, benefits, safety and health didn't exist, there would be no pressure on non-union employers to, at least, try to approach them. Moreover, as the National Labor Relations Act states in its preamble, unions augment worker’s purchasing power and thus boost the entire economy.

If you have any concerns about the danger of large, concentrated private power and money--from the Koch brothers to the oil companies to the insurance companies—unions, even now in their weakened condition, are likely to be the loudest, most powerful ally you will have. Unions, as the old saying goes, the folks who brought you the weekend. And fight for your Social Security. And your Medicare and Medicaid. And--despite a long history of racism, like the rest of America--the Civil Rights Act. And now, increasingly, LGBT rights. Meaning a bunch of issues that have nothing directly to do with unionized workers (the minimum wage doesn't either—and unions fight for that, too.) And safe workplaces. And on and on. At their best, unions try to make America a better place, not merely for their members, but for millions of others.

Unions aren't perfect--they are not a "countervailing" power when what their own workers do is itself anti-social (see the police unions, for example, in the past few weeks post Ferguson). But, if you read the news you understand that governments, corporations, and non-profits like universities aren't perfect, either. In the past several decades of democratic revolutions all over the world--from South Korea to Eastern Europe to South Africa and elsewhere--unions and workers are in the forefront of those struggles. And when those movements are crushed, it is the organizations of workers that are among the first to be destroyed or neutered. In a democratic society, unions are a critical part of the political culture, at their best transcending the differences of race, gender, sexual orientation and much more that divide people from one another, providing a democratic space in civil society between the family and the state. That's what social solidarity is about—sometimes unions have to fight against the wealthy and powerful, but, in doing so, they bring people together.